This invention relates to the field of electronic transactions, and more particularly relates to the use of transaction cards which have been encoded with single-use, write-and-destroy entries representing cash or other value.
Transaction cards have become a preferred media for monetary, or other value, transactions due to ease of use, portability, and self-contained loss limits in the case of theft or accidental misplacement of one""s card. Assigning the cards a fixed xe2x80x9cface value,xe2x80x9d which is decremented with use, allows users to maintain budgets (particularly when used by children) . Transaction cards have gained widespread acceptance for telephone usage, wherein the xe2x80x9ccurrencyxe2x80x9d of the face value is minutes of long distance calling; for toll payment, such as the xe2x80x9cE-Z Passxe2x80x9d program on New York State toll roads; for gas purchases, generally from a fixed group of merchants (e.g., Mobil gas stations), etc.
The types of transaction cards which are presently available include the category of magnetic cards (as shown at 10 in FIG. 1 with magnetic stripe 12), which have encoded information provided in a magnetic stripe, and so-called xe2x80x9csmart cardsxe2x80x9d (20 of FIG. 2) which have on-board processors, 22, and memory locations, 23 and 24, to ensure integrity and reliability. While the magnetic versions are generally much less expensive to produce, their drawbacks include the fact that, in most instances, the magnetic medium can be reprogrammed to illegally add value to a xe2x80x9cspentxe2x80x9d card. Inadvertent exposure to electrical or magnetic fields can cause xe2x80x9creprogrammingxe2x80x9d and/or erasure of information from the magnetic stripe. In addition, the equipment used for programming and for reading of magnetic cards is not as reliable as would be desired.
Disadvantages of the smart card implementation include the expense of the memory and processor components, and the attendant processing, needed for creating each card. Smart cards have been developed with security measures to minimize the risk of counterfeiting cards or altering the programming thereof. Those security measures are, however, limited to the security algorithms which are built into the card and to the security measures which are part of the host card-programming application, and which also add further expense to the production and maintenance of smart cards.
At present, cash cards and smart cards have been limited in their usage to dedicated transactions. For example, a telephone calling card cannot be used to ride a subway, and vice versa. Each merchant or group of closely-related merchants requires the use of a specific card which is monitored (i.e., decremented) by a proprietary system. Therefore, while a user may find transaction cards to be conveniently portable, carrying a dozen such cards can become more burdensome (though still less risky) than carrying cash or a credit card.
Furthermore, transaction cards are generally not useful in foreign travel. While transaction cards may be preferable to carrying money and dealing with conversion to different currencies as one travels into different countries, widespread acceptance of transaction cards has been limited by some of the same shortcomings detailed above. Travelers"" checks and credit cards are more likely used for international travel. If one uses a credit card, however, currency conversion will be done by the credit card issuer at the time of billing, which affords the card user little predictability at the time of purchase. Moreover, credit cards are not always accepted. Travelers"" checks include a measure of loss limitation, in that each check has a limited value and can be traced using its unique serial number. The travelers"" checks are as disadvantageous as cash in many respects, however, since they are limited to their stated currency and denomination, which offers no alleviation of the currency exchange dilemma.
What has been proposed, and is the subject of a co-pending patent application, Ser. No. 09/213,912, entitled xe2x80x9cOPTICAL TRANSACTION CARDxe2x80x9d, which was filed on Dec. 17, 1998, and is assigned to the present assignee, is a transaction card having an optical stripe created using CD-ROM technology. The optical transaction card is initially programmed (i.e., written to) at all available locations on the optical stripe, so that there are no available bits which can be programmed by a counterfeiter. Each bit on the optical stripe can be read many times or erased once time only, and cannot be reprogrammed. Therefore, the so-called xe2x80x9cwrite-and-destroyxe2x80x9d card is ideal for representing fixed amounts of money, or other measures of value. In addition, the optical programming technology is more reliable than that for magnetic stripe cards and is more affordable than that used to create smart cards. As additional advantage, the optical stripe is provided with such information as the issuing financial institution, a unique serial number, the total value of the card, and the relevant currencies and denominations represented by the programmed bits.
What is desirable is to provide a system and method for the ubiquitous use of write-and-destroy transaction cards.
Another objective is to provide for use of a transaction card in a medium which is cost-effective, reliable, and secure.
Still another objective is to provide for use of a transaction card for a variety of non-related transactions.
Yet another objective is to provide for use of a transaction card which can be decremented in various currencies at present-moment rates of exchange during international travel.
Another objective is to provide security and loss limitation by tracking cards through the listed financial institution at time of use.
These and other objectives are realized by the present invention which provides a system and method for using write-and-destroy transaction cards which cannot be reprogrammed. The write-and-destroy transaction cards are programmed (i.e., written to) at bit increments representing, in total, the stated value of the card. The stated value may be represented in one or a plurality of denominations and currencies. In use, the remaining value of a card can be ascertained at a merchant location by reading those bits which have not been erased. The remaining value can additionally be confirmed by contacting the issuing financial institution using a unique serial number which may be encoded onto each transaction card. Upon confirmation that the card has sufficient value to conduct the desired transaction, the card is decremented by erasure of the bits representing that value. By invocation of locally stored software, or based upon communication with a host location, the current rate of currency exchange between the merchant-preferred currency and the currency represented at bit increments on the transaction card can be ascertained and the appropriate value decremented by erasure from the card. Once bits have been erased, they cannot be reprogrammed.